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How potential knowledge spillovers between venture capitalists' entrepreneurial projects affect the specialization and diversification of VC funds when VC effort has value

Publication ,  Journal Article
Kang, HG; Burton, RM; Mitchell, W
Published in: Strategic Entrepreneurship Journal
September 1, 2011

Research concerning diversification and specialization of venture capital funds typically does not consider how a VC's effort might influence performance of different portfolios. We develop a model that analyzes VC effort when there is the potential for cross-sectional and/or serial knowledge spillover among projects. The model generates two implications concerning VC effort and performance. First, VC post-investment effort is a nonmonotonic function of performance shocks, especially for diversified VCs. Second, greater cross-sectional and serial knowledge spillovers improve the performance of specialization relative to diversification, and shape how the number of decision stages in a project affects portfolio choice. © 2011 Strategic Management Society.

Duke Scholars

Published In

Strategic Entrepreneurship Journal

DOI

EISSN

1932-443X

ISSN

1932-4391

Publication Date

September 1, 2011

Volume

5

Issue

3

Start / End Page

227 / 246

Related Subject Headings

  • 3507 Strategy, management and organisational behaviour
  • 1503 Business and Management
 

Citation

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ICMJE
MLA
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Kang, H. G., Burton, R. M., & Mitchell, W. (2011). How potential knowledge spillovers between venture capitalists' entrepreneurial projects affect the specialization and diversification of VC funds when VC effort has value. Strategic Entrepreneurship Journal, 5(3), 227–246. https://doi.org/10.1002/sej.115
Kang, H. G., R. M. Burton, and W. Mitchell. “How potential knowledge spillovers between venture capitalists' entrepreneurial projects affect the specialization and diversification of VC funds when VC effort has value.” Strategic Entrepreneurship Journal 5, no. 3 (September 1, 2011): 227–46. https://doi.org/10.1002/sej.115.
Kang, H. G., et al. “How potential knowledge spillovers between venture capitalists' entrepreneurial projects affect the specialization and diversification of VC funds when VC effort has value.” Strategic Entrepreneurship Journal, vol. 5, no. 3, Sept. 2011, pp. 227–46. Scopus, doi:10.1002/sej.115.
Journal cover image

Published In

Strategic Entrepreneurship Journal

DOI

EISSN

1932-443X

ISSN

1932-4391

Publication Date

September 1, 2011

Volume

5

Issue

3

Start / End Page

227 / 246

Related Subject Headings

  • 3507 Strategy, management and organisational behaviour
  • 1503 Business and Management